Britain’s manufacturing sector was more resilient than expected in September, with growth driven by car factory production lines restarting after summer shutdowns.
Manufacturing output increased by 0.4% over the month according to the Office for National Statistics, beating City expectations of a 0.3% rise. The biggest contributor to growth was car production, but computer, electronic and chemical manufacturing were also drivers.
The annual rate of growth slowed to 2.9% in September from 3.9% in August.
Despite the increase in output in September, economists said growth in the sector, and the wider economy, was gradually slowing. Manufacturing output increased by 0.4% in the third quarter, compared with 0.5% in the second quarter and 1.5% in the first.
David Kern, chief economist at the British Chambers of Commerce, said: “While year-on-year growth for manufacturing is still satisfactory, there is a clear slowdown in the pace of growth both quarterly and year-on-year. This provides further confirmation that expansion of the UK economy has gradually eased in recent quarters.”
The wider measure of industrial production, which includes mining and utilities as well as manufacturing, increased by 0.6% on a monthly basis in September, beating expectations of a 0.4% increase. Annual growth slowed to 1.5% from 2.5% in August.
Alan Clarke, economist at Scotiabank, said evidence from other business surveys suggested there would be a further slowdown in industrial production in the coming months.
“Sadly, there is probably worse news ahead. The [Markit/CIPS] manufacturing [PMI] index – although up this month – is down quite a bit from its peak, so the month-on-month growth rate in industrial production is likely to slow a bit. This is not a disaster – it’s just that we are not booming any more.”
Manufacturing output and industrial production are still below their pre-crisis peak, by 4.1% and 9.5% respectively.
